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It appears to me that you are on the "Playlists" screen in your Remote app. Down at the bottom of the app, you'll see a row of categories like "Playlists", "Artists", and so on. You'll need to select something else. Obviously under "More", you can access more options, and can even edit from there the categories you see at the bottom by default.

If your ATV's HDMI cable is running straight to an AVR, then your TV won't need to be on. If it's connected directly to your TV, then I imagine it will need to be on.

EDIT: and just as a reminder, you will have to have iTunes open on your computer.